Business and Investment opportunities in Colombia by H.E. the Ambassador
1. Economic outlook of Colombia today – and what are the prospects for the country?
Colombia is the third largest country in Latin America with 48 million inhabitants. It is a growing market located strategically to facilitate business transactions with the region. It is the only country in South America with access to both Pacific and Atlantic Oceans, and its strategic position makes this country the ideal scenario for companies that want to expand their businesses across Latin America.
Colombia is one of the countries with the highest growth rate in the region (Colombia GDP average growth in the last five years is 3.2), providing the best dynamic and stable economic conditions for those seeking to expand their businesses. The country is a trade platform with over 16 trade agreements with 60 countries including the EU, enabling investors to reach third markets with preferential access.
Investor confidence has improved. On May 2018, Colombia became full member of OECD, meaning that public institutions of the country will meet standards of the developed world. Being part of an organization such as the OECD is a sign of economic stability, transparency and government discipline, which gives a seal of quality for foreign direct investment.
2. Which kinds of business opportunities are there for Finnish companies in Colombia?
Colombia is a gateway to Latin America. Finnish companies seeking to expand their footprint in South America can set up operations in Colombia and
1. Explore the Colombian market with 48 Million inhabitants and an increasing middle class
2. Set up an expansion operation to the rest of the region
Finnish companies are invited to approach Colombia directly or to look for a strategic alliance with Colombian counterparts.
3. Which kinds of investment opportunities there are for Finnish companies in Colombia?
Colombia offers a wide variety of opportunities in the different sectors of the economy. In terms of infrastructure, Finnish companies can find opportunities in urban public transport projects such as “Metro of Bogotá” and “Transportation PPP in Bogotá” as well as projects in public school infrastructure such as School PPP in Barranquilla and Medellin that aims to build 31 thousand new classrooms.
There are also opportunities in the public health infrastructure sector with the project “Bosa Hospital PPP", with the objective of introducing private efficiency to the city’s medical services. Colombia is the third largest country in the region in terms of population and public expenditure. It is expected that health public expenditure will rise from 6% in 2018 to almost 7.3% in 2028.
In terms of energy, Colombia has opportunities with two main projects: the first one being an energy auction for long-term contracts that will take place in the second half of 2019. This auction is designed for renewable non-conventional energy sources in Colombia. The second project in this sector is the “Bidding process of Natural Gas” for the construction and operation of the Regasification plant of Pacific in Buenaventura Bay.
In technology, there are different opportunities in two different projects: The IMT spectrum in the 700MHz and 1900MHz bands auction providing opportunities to mobile operators, telecommunication tower companies and other digital service providers. In the audio-visual segment, the current government has promoted Economia Naranja / Creative economy as one of its flagships for development. There are tax exemption benefits for the filming industry.
In the agro industrial sector, there are existing opportunities with cocoa, avocado as well as impact investments, which is investing in sustainable social and environmental productive projects in Colombia.
4. If a Finnish company decides to invest in Colombia, what are the most important issues this enterprise must take into its consideration to succeed in the market?
Regarding the Colombian corporate regime, there are five key points that an investor should know:
1. The corporate regime in Colombia enjoys great stability and legal security, is a stable legislation that has been modernized over time.
2. Any investor that intends to develop their business in Colombia permanently must, as a general rule, constitute a legal vehicle, such as a company or a branch of a foreign company.
3. Colombian commercial legislation is flexible and modern in corporate matters. This allows the creation of unipersonal investment vehicles.
4. The legal process of incorporation of a legal vehicle is simple, and does not require government authorization
5. Which kind of assistance and which kind of benefits there are in Colombia for Finnish companies that would like to invest in Colombia?
Colombia offers incentives to those foreign companies that want to invest in the country
The investment of foreign capital as well as technology and knowledge transfer play a fundamental role for the development and growth targets in Colombia. Hence, the Government has worked towards the creation of more incentives for International investors.
- Colombia´s financing law aims at lowering corporate tax rates, developing new incentives for creative industries and tourism infrastructure projects , as well as attracting and supporting the arrival of mega investments and holding companies to Colombia.
- Free Trade Zones represent an important opportunity for third countries to take advantage of the country's Trade Agreements and get tax benefits while taking advantage of the competitive labour offered by Colombians.
- Other incentives: socially responsible investments are also growing; the trade sector is seeking to promote economic and social development in remote zones by creating employment and organizing rural communities. Preferential tax fees for businesses that help reduce their environmental impact by adopting more sustainable practices such as investing in renewable energy.
Additionally, PROCOLOMBIA offers detailed and professional assistance for investors that find interesting business opportunities within the different economic sectors in Colombia. These services include:
· Tailor made information
· Contacts with key stakeholders in the public and private sector.
· Organization of investment agendas during the visit to Colombia.
· Service for investors residing in the country.
· All services are free of charge and the information provided during the process will be made available under complete confidentiality.
6. Please, explain us how Colombia has benefited from the free trade agreements?
· Colombia has Access to 60 countries and more than 1.5 billion consumers through its network of trade agreements. This figure seeks to strengthen trade, regional and free trade integration, as well as benefit from regional platforms and promote trade agreement negotiations.
· Colombia is a Member State of the Pacific Alliance along with Chile, Perú and Mexico. This integration mechanism seeks to strengthen trade, regional and free trade, as well as benefit from regional platforms and promote trade agreement negotiations with the Asia Pacific region and other international markets.
· 12 double taxation agreements in force
· 15 agreements on reciprocal promotion and protection of investment in force
· 16 free trade agreements in force
7. We know Colombia as a great holiday destination for Finns. Please, tell us more about the tourist attractions and holiday resorts in your country.
Colombia has a privileged position in the north-western corner of South America, bathed by the Caribbean Sea and the Pacific Ocean, with such a variety of climates and geography that makes it the most biodiverse country per square meter in the world; this biodiversity is distributed in 5 natural regions within which you can find 311 types of ecosystems, 6 snow - capped peaks, 3 deserts, 36 moorlands and 3 mountain ranges, which allows to have 365 days of tropical weather. The Colombian territory is divided into a flat region to the east and the Andes mountain range to the west, with three major ramifications. Its incomparable beauty is reflected in numerous rivers, snow- capped peaks and desert surfaces.
Colombia is a diverse country thanks to its culture, geography and history, which offer unique and authentic tourism experiences. Experiences that make you travel through time, between colonial architectures and modern cities, indigenous communities and an incredible natural biodiversity; among fairs and festivals that express traditions and a diverse (and delicious) regional gastronomy. Therefore, if you want to fall in love with a country that offers different experiences every day, visit Colombia.
H.E. Ms. Betty Escorcia Baquero; Ambassdor of Colombia to Finland
Colombia day will be arranged on the 12th June 2019 and program will be published in due course